BEFIT: “EU Tax Group” for Corporate Groups
- IG-TAX
- Jan 6
- 2 min read
The European Parliament adopted its position on the BEFIT Directive (“Business in Europe: Framework for Income Taxation”) in mid-November 2025, thereby taking another step toward a fundamental reform of corporate taxation in the European Union.
BEFIT is intended to establish a uniform system for determining the corporate tax base for large multinational groups operating across borders within the EU.
Key Elements of the BEFIT Directive at a Glance
Single Tax Base: Introduction of common EU-wide rules for determining the corporate income tax base for large corporate groups.
Group Approach: The tax bases of the individual group entities will be consolidated at group level and subsequently allocated to the participating Member States according to a standardized formula.
National Tax Rates Remain Unchanged: Each Member State will continue to apply its own corporate income tax rate to the portion of the tax base allocated to it.
Scope of Application: Mandatory for corporate groups with consolidated annual revenues of at least EUR 750 million that operate in more than one EU Member State. Smaller groups subject to consolidation may opt in on a voluntary basis.
Alignment with International Standards: BEFIT builds on the OECD global minimum tax rules (“Pillar Two”) and is intended to simplify their application within the EU.
Reduced Bureaucracy and Greater Legal Certainty: Harmonized rules are expected to significantly reduce administrative burdens, tax complexity, and the risk of double taxation.
Tax Policy Objectives: Strengthening the EU internal market, curbing aggressive tax planning, and increasing tax transparency.
Although the European Parliament’s approval marks an important milestone, the legislative process is not yet complete. Unanimous approval by the Council of the EU is required for the BEFIT Directive to enter into force. According to current plans, the Directive is to be transposed into national law by 2028.
Should you have any questions, our experts Irene Grass and Martin Schmidt will be happy to assist you.
Foto: Unsplash | Guillaume Périgois
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